The

NEW ENGLA ND JOURNAL

of

MEDICINE

Perspective
may 25, 2006

Making Patient Safety the Centerpiece

of Medical Liability Reform
Hillary Rodham Clinton and Barack Obama

e have visited doctors and hospitals throughout the country and heard firsthand from
those who face ever-escalating insurance costs.
Indeed, in some specialties, high premiums are

forcing physicians to give up

performing certain high-risk procedures, leaving patients without
access to a full range of medical
services. But we have also talked
with families who have experienced errors in their care, and it
has become clear to us that if we
are to find a fair and equitable
solution to this complex problem,
all parties physicians, hospitals, insurers, and patients must
work together. Instead of focusing on the few areas of intense
disagreement, such as the possibility of mandating caps on the
financial damages awarded to patients, we believe that the discussion should center on a more fun-

damental issue: the need to improve

patient safety.
We all know the statistic from
the landmark 1999 Institute of
Medicine (IOM) report that as
many as 98,000 deaths in the United States each year result from
medical errors.1 But the IOM also
found that more than 90 percent
of these deaths are the result of
failed systems and procedures, not
the negligence of physicians. Given this finding, we need to shift
our response from placing blame
on individual providers or health
care organizations to developing
systems for improving the quality
of our patient-safety practices.2
To improve both patient safe-

n engl j med 354;21

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ty and the medical liability climate, the tort system must achieve
four goals: reduce the rates of preventable patient injuries, promote
open communication between
physicians and patients, ensure
patients access to fair compensation for legitimate medical injuries, and reduce liability insurance premiums for health care
providers. Addressing just one of
these issues is not sufficient. Capping malpractice payments may
ameliorate rising premium rates,
but it would do nothing to prevent unsafe practices or ensure the
provision of fair compensation to
patients.3
Studies show that the most important factor in peoples decisions
to file lawsuits is not negligence,
but ineffective communication between patients and providers.4 Malpractice suits often result when an
unexpected adverse outcome is

may 25, 2006

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PE R S PE C T IV E

making patient safety the centerpiece of medical liability reform

Main Provisions of the National Medical Error Disclosure and Compensation (MEDiC) Bill
Office of Patient Safety and Health Care Quality

This legislation would create an Office of

Patient Safety and Health Care Quality within the
Department of Health and Human Services. The
director of this office will be responsible for establishing a National Patient Safety Database,
conducting data analyses to inform policy and
practice recommendations, establishing and
administering the National Medical Error
Disclosure and Compensation (MEDiC) program, and supporting studies related to MEDiC
and the medical liability system.

Participating insurance companies and

health care providers would be required to apply a percentage of the savings they achieve
from lowered administrative and legal costs to
the reduction of premiums for physicians and
toward initiatives to improve patient safety and
reduce medical errors.

MEDiC Program

Grants

The MEDiC program would promote open

communication between patients and providers; reduce the rates of preventable medical errors; ensure patient access to fair compensation for medical injury, negligence, or malpractice; and reduce the cost of medical liability insurance.

The director would develop and oversee grant

programs to encourage participation in the
MEDiC program and support patient-safety initiatives. Funding may be used to develop and
implement communication training programs
for health care providers; to improve the use
of information technology for the reporting, collection, and analysis of patient-safety data; to
facilitate the tracking and analysis of local and
regional patient-safety trends; and to develop
and disseminate safety training guidelines and
recommendations.

The MEDiC program would provide federal

grant support and technical assistance for doctors, hospitals, and health systems that disclose medical errors and problems with patient
safety and offer fair compensation for injuries
or harm. Participants would submit a safety
plan and designate a patient-safety officer, to
whom these disclosures and notices of related
legal action would be reported. If a patient was
injured or harmed as a result of medical error
or a failure to adhere to the standard of care,
the participant would disclose the matter to the
patient and offer to enter into negotiations for
fair compensation.
The terms of negotiation for compensation
ensure confidentiality, protection for any disclosure made by a health care provider to the patient in the confines of the MEDiC program, and
a patients right to seek legal counsel; they
also allow for the use of a neutral third-party
mediator to facilitate the negotiation. Any
apology offered by a health care provider dur-

2206

ing negotiations shall be kept confidential and

could not be used in any subsequent legal proceedings as an admission of guilt if those negotiations ended without mutually acceptable
compensation.

n engl j med 354;21

Studies
The Office of Patient Safety and Health Care
Quality would conduct three studies: an analysis of the patient-safety data from its new database and other sources to determine performance
and systems standards, as well as safety tools
and best practices for health care providers; an
analysis of the medical liability insurance market to determine historical and current legal
costs related to medical liability, factors leading
to increased legal costs, and which, if any, state
liability insurance reforms have led to stabilization or reduction in medical liability premiums;
and a database study of cases that were not successfully negotiated through the new program,
to determine the reasons, trends, and effects of
such outcomes.

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PE R S PE C TI V E

making patient safety the centerpiece of medical liability reform

met with a lack of empathy from

physicians and a perceived or actual withholding of essential information.4 Stemming the causes
of medical errors requires disclosure and analysis, which create
tension in the current liability
climate.
The current tort system does not
promote open communication to
improve patient safety. On the
contrary, it jeopardizes patient
safety by creating an intimidating liability environment. Studies
consistently show that health care
providers are understandably reticent about discussing errors, because they believe that they have
no appropriate assurance of legal protection.5 This reticence, in
turn, impedes systemic and programmatic efforts to prevent medical errors.
To overcome the impasse in
the debate on medical liability,
we have introduced legislation,
the National Medical Error Disclosure and Compensation (MEDiC)
Bill (S. 1784), to direct reform toward the improvement of patient
safety (see box). Our proposed
MEDiC program provides grant
money and technical assistance to
doctors, hospitals, insurers, and
health care systems to implement
programs for disclosure and compensation. The MEDiC model promotes the confidential disclosure
to patients of medical errors in an
effort to improve patient-safety
systems. At the time of disclosure,
compensation for the patient or
family would be negotiated, and
procedures would be implemented to prevent a recurrence of the
problem that led to the patients
injury.
Under our proposal, physicians
would be given certain protections
from liability within the context

of the program, in order to promote a safe environment for disclosure. By promoting better communication, this legislation would
provide doctors and patients with
an opportunity to find solutions
outside the courtroom. In return,
MEDiC program grantees would
be required to use savings achieved
by reducing legal defense costs
to reduce liability insurance pre-

Malpractice suits
often result when an
unexpected adverse
outcome is met with
a lack of empathy
from physicians and
a withholding of
essential information.
miums and to foster patient-safety
initiatives.
The MEDiC program is based
on model programs around the
country that have demonstrated
successful approaches to protecting both patients and doctors while
improving the quality of care. A
number of hospital systems and
liability insurance providers have
already adopted a policy of robust
disclosure of medical errors. These
programs have been successful
in reducing administrative and
legal costs for providers, insurers,
and hospitals. Surveys also show
greater trust in and satisfaction
with health care providers on
the part of patients. Ultimately,
through these programs, disclosure of medical errors has resulted
in the filing of fewer malpractice
suits, a reduction in litigation costs,

n engl j med 354;21

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accelerated provision of compensation to patients, and increases in

the numbers of patients who are
compensated for their injuries.
The link between the medical
liability environment and patient
safety has been illustrated by a
number of these programs. In
2002, the University of Michigan
Health System launched a program
with three components: acknowledge cases in which a patient was
hurt because of medical error and
compensate these patients quickly
and fairly; aggressively defend
cases that the hospital considers
to be without merit; and study all
adverse events to determine how
procedures could be improved. Before August 2001, the organization had approximately 260 claims
and lawsuits pending at any given time. As of August 2005, the
number had dropped to 114 (see
graph). The average time from the
filing of a claim to its resolution
was reduced from approximately
21 months to less than 10 months.
Annual litigation costs dropped
from about $3 million to $1 million. The health care system has
begun to reinvest these savings in
the automation of its patient-safety reporting systems. Since the
implementation of this program,
the University of Michigan Health
System has expanded the number
of practicing clinicians and faculty members in high-risk fields
such as obstetricsgynecology and
neurosurgery.
In 1987, after two malpractice
cases that together cost it more
than $1.5 million, the Veterans
Affairs (VA) Hospital in Lexington, Kentucky, adopted a policy of
robust disclosure of medical errors, with early offers of compensation to its injured patients.
As a result of its 19 years of ex-

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PE R S PE C T IV E

making patient safety the centerpiece of medical liability reform

Annual litigation
costs

Average time
to resolution
of claims
and lawsuits

No. of claims
and lawsuits

versarial manner, providing fair

compensation, and improving patient care. We believe that the
MEDiC Bill provides a commonsense solution that avoids the political pitfalls that have hampered
other efforts to reform the medical liability system.

$3 Million
$1 Million

20.7 Months
9.5 Months

262
114

August 2001
August 2005

Results of Medical Error Disclosure Program at the University of Michigan Health

System.

perience with this approach, the

hospital has liability costs well
below those of comparable VA
hospitals. Data show that average
settlements were approximately
$15,000 per claim, as compared
with more than $98,000 at other
VA institutions. The policy has
also decreased the average duration of cases, previously two to
four years, to two to four months,
as well as reduced costs for legal defense. These are just two
examples of such programs, but
their results are consistent with

those of other organizations that

have adopted a similar model.
We realize that the implementation of the MEDiC model will
not come without effort. A safe
and appropriately confidential environment must be created that allows open communication between
physicians and patients about adverse outcomes. Initially, medicalerror transparency may be difficult
to foster. However, organizations
that have put disclosure programs
into practice have been effective in
resolving disputes in a less ad-

An interview with Richard Boothman of the

University of Michigan Health System can
be heard at www.nejm.org.
Senator Clinton (D-N.Y.) and Senator Obama
(D-Ill.) are coauthors of the MEDiC bill.
1. Kohn LT, Corrigan JM, Donaldson MS,
eds. To err is human: building a safer health
system. Washington, D.C.: National Academy
Press, 2000.
2. Sage WM. Medical liability and patient
safety. Health Aff (Millwood) 2003;22(4):2636.
3. Thorpe KE. The medical malpractice crisis: recent trends and the impact of state
tort reforms. Health Aff (Millwood) 2004;
Suppl Web Exclusives:W4-20W4-30.
4. Liebman CB, Hyman CS. A mediation skills
model to manage disclosure of errors and adverse events to patients. Health Aff (Millwood)
2004;23(4):22-32.
5. Mariner WK. Medical error reporting: professional tensions between confidentiality &
liability. Issue brief. Boston: Massachusetts
Health Policy Forum, November 6, 2001:1-35.

FOCUS ON RESE ARCH

Lymphocytic Choriomeningitis Virus An Old Enemy

up to New Tricks
C.J. Peters, M.D.
Related article, page 2235

ymphocytic choriomeningitis
virus (LCMV) was among the
first human pathogenic viruses to
be isolated. In the mid-1930s, Armstrong and Lillie obtained a filterable agent thought to be from the
brain of a man who died during
an epidemic of St. Louis encephalitis, Traub discovered a chronic

2208

infection in a mouse colony, and

Rivers and Scott isolated a virus
from the cerebrospinal fluid of patients with aseptic meningitis (see
image).1 All three of these viruses were shown to have the same
properties and serologic features,
and LCMV became the type species characterizing the virus family

n engl j med 354;21

www.nejm.org

Arenaviridae, established in 1970. In

nature, each of the approximately 20 known arenaviruses chronically infects a single rodent species, with long-term shedding of
virus, but with minimal or no
overt disease.
The study of mice infected with
LCMV has led to Nobel Prizewin-

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